What do buyers really think about buying cars online?

Ever since the launch of online retail giants Amazon and eBay in 1995, consumers across the world have increasingly moved towards making more of their purchases online rather than using traditional bricks and mortar stores.

However, one industry that has been slow to adopt the digital revolution has been automotive retail. Buyers, for many years, have opted to visit a forecourt to make a vehicle purchase. Admittedly, there have been very few options to buy a car online in the past. That said, we are already seeing a major shift in the industry with new entrants and existing players starting to offer online car sales.

But whilst the options are now available, what exactly do buyers think of online car sales?

It’s this question that we’ll answer in the first of our series of blogs using research and insights from our latest Market Report, Digital car buying. You can view the full report by clicking here.

How has consumer sentiment changed?

We can’t talk about online retailing without addressing the coronavirus-shaped elephant in the room. Covid-19 has had a significant impact on online retailing with a third of UK retail sales done online in May 2020 compared to just 19% in May 2019.

This growth in appetite for online retail also extends to car sales with 41% of buyers indicating that they would be willing to purchase a car online. 61% also indicated that it would be appealing, if they received an explanation of how the buying journey would work.

When looking at how this has increased from August last year, we can see a clear increase from 37% to 41% of buyers who would be willing to buy a car. A similar increase is seen when specifying if they would buy a new or used car.

What do buyers want to do online?

It will take time to see mass adoption of online car sales by regular car buyers, with many still needing to understand the process. But buyers do want to be able to complete more of the car buying journey online.

For many buyers, online is where they do their research before making a purchase. However, our research has found that many buyers would like to have completed more of their car buying journey online.

Of the tasks that buyers would have liked to complete online, booking a test drive and estimating the value of their vehicle came out as the top tasks.

Enabling these tasks to be completed by the buyer online not only saves buyers time, it also saves retailers time and requires very little effort to set up.

We have also recently opened our Guaranteed Part-Exchange (GPX) trial to all retailers. GPX will allow buyers to get a guaranteed part-exchange value, based on our award-winning valuations and underwritten by Manheim, using a form on your Auto Trader adverts.

This way, a buyer knows what value they can expect to get for their vehicle. The retailer has no risk, as any unwanted part-exchanges will be paid for and collected by Manheim.

You can find out more about the GPX at https://trade.autotrader.co.uk/products/gpx-early-adopter

Overall, 35% of buyers want to buy a car online to get their car quicker. This is also shown when looking at the tasks buyers wish to complete online such as getting insurance quotes, comparing vehicles inc. specs and prices and exploring finance offers. All of these tasks enable buyers to save time compared to visiting a forecourt and allow them to be better informed when they come to finally making the purchase.

But more than speed, buyers are looking for an easy and convenient buying process with 46% of buyers highlighting these as the main reasons they want to buy a car online. A further 33% believe buying online will get them a better deal and 22% want to buy online to avoid the inconvenience of haggling.

It’s clear then, that buyers are looking to complete any buying tasks online. This includes potentially buying a car - if it saves them time, effort and is easy to use. It’s key for retailers to keep this in mind when developing a digital offering.

 Who is the online car buyer?

Our research identified that not all online car buyers are the same with three clear segments of online car buyers revealled by our analysis.

Proactive showroom visitors

These buyers are happy to do most things online but still value certain aspects of the offline retail experience.

They value a blended retail experience and tend to end up online because they struggle to get the right deal or car offline, or because they have had an in person recommendation on online tools.

Reluctant showroom visitors

Unlike proactive showroom visitors, these buyers want to do everything online but still need the offline retail experience for certain tasks.

They resort to a blended online offline experience because they feel they can’t do some elements online but are more likely to complete more tasks online the next time they buy a car.

Digital adopters

The final buyer segment have fully embraced online retail, competing all their car buying tasks online with no need to visit a retailer forecourt.

They feel the online car buying process works well and see no reason to visit a physical forecourt.

What barriers remain?

Whilst we can clearly see an ongoing shift in positive consumer sentiments towards buying a car online, there are still barriers that remain with the research from our latest Market Report highlighting two key factors that are preventing buyers from fully embracing online car buying.

The first of these barriers is that, put simply, the buying process itself is difficult. The difficulty, and the fact that the car buying journey is one that is out of many buyer’s comfort zone, means that buyers will stick with what they know i.e. purchasing in person at a forecourt rather than seek out new and potentially easier ways to carry out the purchase.

There is also the challenge of replicating the emotional and sensory elements i.e. how it makes a buyer feel and the test drive experience, of the car buying journey in an online. Buyers struggle to understand how the online journey can replicate the emotive experience. Its therefore critical to ensure there is an emotive experience in a digital car buying experience through the use of regular personalised communications, in particular through video.

The final key barrier is a lack of knowledge among buyers of online car buying tools. As with the emotive elements of car buying, many buyers simply don’t see how online car sales operate with online car sales a futuristic concept for many buyers. Awareness of online car buying is therefore relatively low but so too is awareness of online tools that can be used to complete car buying jobs easier than in person, with our research highlighting that many buyers found such tools by accident.

To overcome these barriers, it is therefore key that buyers are educated by retailers on what tools are available online to make them buying process easier for them and ultimately help to draw them into online car buying in the future.

This blog is based on the findings of our latest Market Report with this iteration focussed on digital car buying. You can view the full report by clicking here.